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Old 01-05-2007, 05:04 PM
 
1 posts, read 2,673 times
Reputation: 12

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I am a homeowner that is in trouble with the mortgage. We have always had the intention on selling the home once it was fixed up... long story short. Foreclosure. Anyway, I've been approached by a company and spoke at length w/ a loan officer. They mentioned an interest only loan because of my intentions to sell in the near future.

What are the advantages and disadvantages?

Any opinions? Any other options?

SeanzAceFree
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Old 01-05-2007, 09:16 PM
 
Location: Tampa Bay Area Florida
7,937 posts, read 20,377,459 times
Reputation: 2027
The interest free loans can be dangerous...they are good for short term however if you only pay the interest you go into negative amorization..In english lets say you owe 300k now every month that amt is going to go up...so if you decide in 1 year to sell your loan amt is going up instead of going down..it takes about 5 years to get to what a conventional loan would be on the originally loan amt...This loan hurts people that are in a BAD MARKET because home prices have come down, and so many people have high mortgages and walk away with very little profit...

Hope this helps...Make sure u get ALL THE FACTS on the interest only's.....they only work for certain people and certain situations...
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Old 01-06-2007, 09:17 AM
 
Location: Missouri
6,044 posts, read 24,089,952 times
Reputation: 5183
Be wary of companies that find you and approach you about home loans. I recently read a couple of articles, about fake companies that approach people who are at risk of losing their loans, and these companies really screw them over. Sometimes you end up signing your house over to them without knowing it, and still owe money on it! Have an attorney (not their attorney!) review all the papers before you sign. You may also want to consult a financial adviser about your options; it would be worth spending the money in the long run.
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